Dish TV chief executive officer RCVenkateish is at it again. He is out totame broadcasters and has this timealigned with Siti Cable Network,another Essel Group-controlleddistribution platform. Displaying theircombined strength of 20 million digitalsubscribers, the two companies willseek to stitch content deals withbroadcasters that are favourable tothem.Comnet, the joint venture betweentwo distribution platform companies,will aim to snatch the balance ofpower away from the bigger broadcastnetworks. The JV will welcome otherdirect-to-home (DTH) and cable TVcompanies as well.What will be the knock-on effects?How will the separate businessdynamics of a DTH and a multi-systemoperator (MSO) provide a commonground? Will the muscle power beeffective or just figurative?In an interview with Sibabrata Das ,Venkateish explains how content andcarriage deals can tilt in favour ofdistribution platforms if they unite.Q. This is the first time in India thattwo distribution platforms are joininghands to stitch content deals. IsComnet going to function like anagent for distribution platformoperators?Ours is the content aggregator model,but on the distribution platform side.A joint venture company is beingformed with Dish TV and Siti Cable asequal partners. But it will be like anyother aggregator company, having anindependent team with a separateCEO, and operate as an agent. While itwill negotiate with the broadcasterson behalf of the two companies,ultimately the contracts will be doneindividually.Q. What will Dish TV and Siti Cable aimto achieve through Comnet?Our main purpose is to keep contentinflation manageable. We have acombined strength of 20 million digitalsubscribers. We will get bettercommercial terms once we sit down tonegotiate with broadcasters.Consumers stand to benefit if ourcontent costs are lower.‘Ours is the content aggregatormodel, but on the distributionplatform side. We are not restrictingComnet to just two distributioncompanies from the same group. Weare actively talking to a couple ofdistribution platforms to join us. Theyare a DTH and a cable company, but Iwouldn’t like to name them. Having acommon entity that is dealing withover 30 million subscribers can changethe game’Q. Dish TV has guided to content coststaying in lower single-digit increasein FY16. The content deals only comeup next year in September, by whenthe company would have reached 15million subscribers. So is Comnetformed more to protect Siti Cable aswe near the deadline for Phase III ofdigital addressable system (DAS)?Nothing’s been sorted out in thisbusiness. It is true that we wouldhave reached 15 million subscribers onour own by the time our deals withthe bigger broadcast networks likeStar India fall due. But it is better tobe prepared before the renewal timearrives. If we always look at our ownpond, we won’t be able to grow.We are from the same group and wefeel that there are synergies that wecan benefit from. But there will beoperational flexibility of each ofthese companies so that they benefitindividually.Q. How much of a game-changer doyou think this move will be?We are not restricting Comnet to justtwo distribution companies from thesame group. We are actively talking toa couple of distribution platforms tojoin us. They are a DTH and a cablecompany, but I wouldn’t like to namethem. Having a common entity that isdealing with over 30 millionsubscribers can change the game. It isa long-term play.Q. Dish TV was earlier in talks withVideocon d2h and Airtel Digital TV toform a joint venture that would seekto reduce content costs and demandhigher carriage, but nothing came outof that. What gives you theconfidence that other distributionplatforms outside the Essel Group willjoin Comnet?When we are able to demonstrate thatwe can get better deals frombroadcasters, others will join.‘The market trend is to do CPS deals.Comnet will negotiate better CPSrates. This will be shared by all theplatform providers that come underour roof. Though the businessdynamics of a DTH company isdifferent from that of an MSO, itultimately boils down to negotiations.With superior subscriber numbers, wecan do better’Q. DTH and MSOs operate in separatedynamics. While broadcasters dolonger-term deals with DTHoperators, they normally have annualcontracts with MSOs. How do you builda common ground?The market trend is to do cost-per-subscriber (CPS) deals. We will not dofixed-fee deals. Comnet willnegotiate better CPS rates. This willbe shared by all the platform providersthat come under our roof. Though thebusiness dynamics of a DTH company isdifferent from that of an MSO, itultimately boils down to negotiations.With superior subscriber numbers, wecan do better.Q. Negotiations purely for contentdeals may look theoretically simpler.But what about carriage deals wherethe gulf between the DTH operatorand the MSO is so wide? How does thatwork in case of Dish TV and SitiCable?As in the case of content where it iscost-per-subscriber, carriage couldevolve into a charge-per-subscriber.We know a wide gap needs to bebridged there, but we will see how itgoes. We are working out themodalities and are in the process offormulating the basic template. Wecould be flexible on carriage and workout a differential charge-per-subscriber initially. All that is openright now. We will see how thenegotiations go. But eventually,carriage should be on similar terms.Q. When do Dish TV and Siti Cablestart working jointly in dealing withbroadcasters? Since your next roundof renewals start only in September2016, how is it possible to negotiatefrom now?We can start with the smallerbroadcasters. Even on carriage, ourmonetising ability will be better.When a new channel is in its launchphase, what we will offer themimmediately is a reach of 20 millionsubscribers. Just being with us willgive them immediate visibility, goodreach, and the possibility of gettingbetter ratings. The bargaining powerwill tilt in our favour. The value ofour deal will be more than the sum ofthe parts.‘We can start with the smallerbroadcasters. Even on carriage, ourmonetising ability will be better.When a new channel is in its launchphase, what we will offer themimmediately is a reach of 20 millionsubscribers. Just being with us willgive them immediate visibility, goodreach, and the possibility of gettingbetter ratings. The bargaining powerwill tilt in our favour. The value ofour deal will be more than the sum ofthe parts’Q. What other synergies will open up?We can use it for sourcing set-topboxes (STBs) and other equipment. Wecan use our joint strength forbettering advertising rates because ofthe enhanced reach we offer. We canalso use it for value-added services.Q. Wasn’t Dish TV looking atmanufacturing STBs?Even if we decide to do so, that willtake time. The idea was more to getour vendors to come here. We wouldwork with the existing vendors andprovide ancillary support. But thegovernment has not yet offered anytax sops to make indigenous STBmanufacturing attractive. We willhave to wait to see how GST works.Q. Will Comnet help Dish TV and SitiCable to expand aggressively in PhaseIII and IV of DAS?When it comes to subscriber additions,we will be competitors. There is nosynergy line in this part of thebusiness. We will aggressively try topocket our consumers independentlyof each otherhttp://www.televisionpost.com/interview/...in-our-jv/